Nikola Faces Allegations of Battery Failures and Fuel Cell Shutdowns - EV

Written by Cláudio Afonso | LinkedIn | X

The battery electric and fuel cell electric truck maker Nikola faced on Tuesday accusations of not repairing customers’ trucks “in a timely manner,” leaving them “out of service with no explanation.”

“I have experienced an amazing amount of warranty repair down time in the last 14 weeks only making five of my weekly trips from Oakland to Long Beach,” one of Nikola’s fleet customers wrote on Tuesday.

While sharing a negative opinion article from the platform SeekingAlpha that highlighted Nikola‘s financial struggles, the customer said he has been dealing with “battery failures and fuel cell shutdowns.”

“This is tough medicine for shareholders and Nikola Truck owners considering the future of our investments and truck purchases. I have experienced an amazing amount of warranty repair down time in the last 14 weeks only making five of my weekly trips from Oakland to Long Beach. Dealing with battery failures and fuel cell shutdowns. Nikola will not make repairs in a timely manner and just leave the truck out of service with no explanation,” he wrote.

Nikola’s shares hit a record low of $3.19 on Tuesday extending year to date losses to about 88%.

In June 2023, Nikola recalled 209 battery-electric trucks, covering all units produced since November 2021, to address potential battery pack issues. The recall followed an incident at Nikola’s headquarters where a fire destroyed five trucks.

In its third-quarter earnings report, Nikola disclosed that revenue took a $7.7 million hit after the company repurchased 20 BEV trucks from a dealer. However, CFO Tom Okray stated that the company has a purchase order to deliver these trucks to another dealer before the end of this quarter.

Nikola has accepted the return of 78 BEV trucks from dealers and fleets after last year’s recall and has another 81 units expected to be returned. The company currently holds another 150 BEV trucks in its inventory.

Nikola‘s stock, which has started trading through a reverse merger with special-purpose acquisition company (SPAC) VectorIQ Holdings in June 2020, reached on Tuesday a new all-time low at $3.19.

Last week, Nikola’s Chief Financial Officer Tom Okray stated that the company has a cash runway of “five to six months,” with a monthly burn rate of $30 million to $40 million.

At the third quarter earnings conference call, the CFO added that the company is “working right now to try to raise the necessary capital to give us the runway to go much further into 2025.”

In June, Nikola executed a 1-for-30 reverse stock split to regain compliance with Nasdaq listing requirements.

Written by Cláudio Afonso | LinkedIn | X